Wheat price heading for biggest jump in two months as Iran war threatens to drive food security higher – business live

Introduction: Wheat price heading for biggest jump in two months

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

A jump in the wheat price is adding to concern that the conflict in the Middle East will fuel food inflation this year.

Chicago wheat futures are up almost 4.5% this week, heading for their biggest weekly jump since February. Concerns about dry weather in the US, and the Iran war, are both factors.

The jump in fertiliser and diesel prices since the war began at the end of February have hit farmers’ costs, and could lead to lower harvest levels – especially as traffic through the strait of Hormuz remains largely blocked.

A new report from humanitarian group Mercy Corps this week has highlighted that disruptions to fuel, fertiliser, and shipping have rapidly transmitted to import-dependent economies, affecting planting seasons now underway in Somalia, Ethiopia, and Pakistan.

Food insecurity outcomes for 2026 and 2027 are now “locked in” for some of the world’s most fragile countries, Mercy Corps warns.

Its research shows:

Global fertiliser prices have surged during critical planting periods.
Fuel prices rose as much as 150% within days in some markets, driving up transport and water costs.
Commercial shipping through the Strait of Hormuz fell by more than 90%, constraining agricultural supply chains.
In Somalia, fuel spikes have doubled the cost of water in drought-affected areas.
Humanitarian shipments to Sudan are being rerouted via the Cape of Good Hope, adding roughly 6,000 miles and up to three weeks to transit times.
The World Food Programme estimates 45 million additional people could be pushed into acute hunger globally.

That comes as dry conditions in the US Plains threaten to curb wheat yields there. Data last week showed that more than half of the US is in drought, following low rainfall.

Dry weather in Australia, and the Black Sea growing region, are also hurting wheat yields there.

The agenda

10am BST: Eurozone trade data for February
1.30pm BST: IMF: Europe Department press briefing
6pm BST: Baker Hughes count of US oil rigs

Key events

The jump in wheat prices comes as food inflation is already forecast to climb over the coming months.

Capital Economics predict UK food inflation could almost double by mid-2027, telling clients:

Outside of fuel and utilities, the prices of flights, other forms of transport, flowers and food are likely to rise the most in response to the Iran war. In our baseline scenario, food price inflation rises from 3.3% in February to 6.0% in the middle of next year.

Cuts to overseas aid will worsen shocks to global economy, David Miliband says

Richard Partington

Cuts to overseas aid by countries including the US and the UK risk stoking global economic instability amid the humanitarian crisis resulting from the Iran war, David Miliband has told my colleague Richard Partington.

The former British foreign secretary and head of the International Rescue Committee (IRC) said the US “abandoning” of its aid programme under Donald Trump would worsen shocks to the global economy that would impact poor and wealthy countries alike.

Miliband also said he regretted that Keir Starmer’s government was slashing the UK’s aid budget, because supporting the world’s poorest was morally the right thing to do and a “good investment for Britain”.

The former Labour minister said:

“An untended humanitarian crisis is an incubator of political instability. We are in a more connected world than ever before.

“The Iran war shows how connected we are, but the connections go the other way [from poor to rich countries], too.”

Here’s the full story:

Introduction: Wheat price heading for biggest jump in two months

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

A jump in the wheat price is adding to concern that the conflict in the Middle East will fuel food inflation this year.

Chicago wheat futures are up almost 4.5% this week, heading for their biggest weekly jump since February. Concerns about dry weather in the US, and the Iran war, are both factors.

Food insecurity outcomes for 2026 and 2027 are now “locked in” for some of the world’s most fragile countries, Mercy Corps warns.

Its research shows:

Global fertiliser prices have surged during critical planting periods.
Fuel prices rose as much as 150% within days in some markets, driving up transport and water costs.
Commercial shipping through the Strait of Hormuz fell by more than 90%, constraining agricultural supply chains.
In Somalia, fuel spikes have doubled the cost of water in drought-affected areas.
Humanitarian shipments to Sudan are being rerouted via the Cape of Good Hope, adding roughly 6,000 miles and up to three weeks to transit times.
The World Food Programme estimates 45 million additional people could be pushed into acute hunger globally.

That comes as dry conditions in the US Plains threaten to curb wheat yields there. Data last week showed that more than half of the US is in drought, following low rainfall.

Dry weather in Australia, and the Black Sea growing region, are also hurting wheat yields there.

The agenda

10am BST: Eurozone trade data for February
1.30pm BST: IMF: Europe Department press briefing
6pm BST: Baker Hughes count of US oil rigs

Wheat price heading for biggest jump in two months as Iran war threatens to drive food security higher – business live | Business

The agenda